Investors in Lumentum Holdings Inc (NASDAQ: LITE) will see new options trading take effect today for the November 20th expiration. The $860.00 strike put option has a current bid of $197.70, allowing investors to purchase the stock at an effective cost basis of $662.30, which is approximately 2% below today’s trading price of $879.17 per share. This opportunity presents a potential 22.99% return on cash commitment if the option expires worthless, reflecting a 45.59% annualized yield.
On the calls side, the $980.00 strike call option is currently bid at $204.50, enabling investors to sell this covered call while owning the shares. This could yield a total return of 34.73% if the stock is called away at expiration, though there’s a 41% chance the contract may expire worthless, allowing investors to retain both the shares and the premium collected. The implied volatility for both options is approximately 94%.
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